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`UNITED STATES PATENT AND TRADEMARK OFFICE
`___________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
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`INTEL CORPORATION,
`Petitioner,
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`v.
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`VLSI TECHNOLOGY, LLC,
`Patent Owner.
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`___________________
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`Case IPR2019-01196
`Patent No. 7,246,027
`___________________
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`PATENT OWNER'S SUR-REPLY IN SUPPORT OF PATENT OWNER'S
`PRELIMINARY RESPONSE
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`Mail Stop "PATENT BOARD"
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`EXHIBIT LIST
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`Declaration of Professor Engin Ipek in Support of Patent
`Owner's Preliminary Response
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`Declaration of Dr. Thomas M. Conte in Support of Patent
`Owner's Opening Claim Construction Brief in VLSI
`Technology LLC v. Intel Corp., No. 1:18-cv-00966-CFC (D.
`Del., May 31, 2019), filed as Document No. 229-2, pp. 216-
`256 on Aug. 19, 2019
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`Declaration of Dr. Thomas M. Conte in Support of Patent
`Owner's Reply Claim Construction Brief in VLSI Technology
`LLC v. Intel Corp., No. 1:18-cv-00966-CFC (D. Del., July
`19, 2019), filed as Document No. 229-2, pp. 258-294 on
`Aug. 19, 2019
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`Excerpt of Joint Claim Construction Brief in VLSI
`Technology LLC v. Intel Corp., No. 1:18-cv-00966-CFC (D.
`Del., August 19, 2019), filed as Document No. 228
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`Complaint in VLSI Technology LLC v. Intel Corp., No. 1:18-
`cv-00966-CFC (D. Del., June 28, 2018)
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`Scheduling Order in VLSI Technology LLC v. Intel Corp.,
`No. 1:18-cv-00966-CFC (D. Del., November 1, 2018), filed
`as Document 40
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`Petitioner Intel Corporation's Amended Identification of
`Prior Art Combinations in VLSI Technology LLC v. Intel
`Corp., No. 1:18-cv-00966-CFC, served on June 24, 2019
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`Excerpt of Merriam-Webster's Collegiate Dictionary, 10th
`Ed. (1999), p. 997
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`Excerpt of Cambridge International Dictionary of English by
`Cambridge University Press (1996), p. 1211
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`Ex. 2001
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`Ex. 2002
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`Ex. 2003
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`Ex. 2004
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`Ex. 2005
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`Ex. 2006
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`Ex. 2007
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`Ex. 2008
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`Ex. 2009
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`Ex. 2010
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`Ex. 2011
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`Ex. 2012
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`Ex. 2013
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`Ex. 2014
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`Excerpt of Cassell's English Dictionary by Cassell & Co.
`(1998), pp. 1063-64.
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`Excerpt of The New Oxford American Dictionary by Oxford
`University Press (2001), p. 1451
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`Excerpt of Operation and Modeling of The MOS Transistor
`by Yannis Tsividis by WCB/McGraw-Hill, 2nd Ed. (1999)
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`Excerpt of Markman hearing transcript dated November 5,
`2019 in VLSI Technology LLC v. Intel Corp., No. 1:18-cv-
`00966-CFC
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`Oral order dated November 5, 2019 concerning Markman
`hearing in VLSI Technology LLC v. Intel Corp., No. 1:18-cv-
`00966-CFC
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`In its request for a reply, Petitioner never informed the Board that it foresaw
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`that 35 U.S.C § 314(a) would be an issue but chose not to present any relevant
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`facts or distinguish any precedential case law. Pet. 3. Having gained an unfair
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`advantage by withholding this information until the reply, Petitioner now resorts to
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`further sleight-of-hand in its reply. For example, Petitioner attempts to excuse its
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`late filing by implying that the filing depended on how Patent Owner narrowed its
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`asserted claims in the district court. Yet, the Petition challenged all originally
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`asserted claims, underscoring the fact that Petitioner could have filed the same
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`arguments earlier. As the Board has noted, "an objective of the AIA [is] to provide
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`an effective and efficient alternative to district court litigation." NHK Spring,
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`IPR2018-00752, Paper 8 at 20. Having delayed the filing until the last minute and
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`thus allowing the district court trial to conclude before the FWD, Petitioner has
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`elected to have the district court address the validity issue.
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`I.
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`The Petition Should Be Denied Under Precedent
`The updated trial practice guide ("TPG"), first issued in August 2018 and
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`reaffirmed in July 2019, provides that "events in other proceedings related to the
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`same patent, either at the Office, in district courts, or the ITC" could []"favor
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`denying a petition even though some claims meet the threshold standards for
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`institution under 35 U.S.C. §[] 314(a) . . . ." 2018 TPG at 10-11; 2019 TPG at 25-
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`26. Both versions cite the 2017 NetApp, Inc. v. Realtime Data LLC to explain that
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`the Board may deny institution under §314(a) "where, due to petitioner’s delay, the
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`Board likely would not have been able to rule on patentability until after the
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`district court trial date." Id. The TPG advises the parties to "address in their
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`submissions whether any other such reasons exist in their case that . . . may bear on
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`the Board’s discretionary decision to institute or not institute, and whether and how
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`such factors should be considered . . . ." Id.
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`Petitioner was plainly aware of the need to address these factors, including
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`the alleged "uncertainty whether a trial in the district court would conclude before
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`or after the trial of this Petition." Pet. 3. Petitioner, however, does not even
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`attempt to explain why it contends the district court trial will not conclude before
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`the trial of this proceeding given the scheduling order.1 Pet. 3; Reply at 2; Ex.
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`1020 at 1, 9. The Reply also makes clear that Petitioner understood that it needed
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`to address the overlap between the prior art in the district court and those in the
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`Petition but elected not to do so in the Petition. Pet. 3 (Petitioner arguing that
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`because it may have "a limited amount of time during [district court] trial to mount
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`an invalidity defense," it decided to file the IPRs). Petitioner bears the burden to
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`1If Petitioner contends that it did address the issue in the Petition, then it
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`should not have asked to take a second stab at the same issue.
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`show that it is entitled to the discretionary institution, including under § 314(a). It
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`is thus not entitled to delay this part of its affirmative showing until after it has
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`reviewed the POPR.
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`In addition to the procedural impropriety of Petitioner's reply, the facts also
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`favor denying the Petition under the precedent and the trial practice guide.
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`Petitioner first attempts to differentiate NHK Spring and ZTE on the ground that
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`the Board in those two cases also independently denied the Petition under § 325(d).
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`Reply at 1-2. The precedential NHK Spring, however, makes clear that denial
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`under § 314(a) is an independent ground of denial, irrespective of whether
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`Petitioner made a case under § 325(d). Paper 8 at 18, last sentence; 20, 2nd
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`paragraph, 1st point. This is confirmed by E-One and more recent cases like Next
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`Caller, Inc. v. TrustID, Inc. (IPR2019-00961), where the Board denied institution
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`solely based on the advanced stage of the parallel proceeding and the overlap in
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`issues. Petitioner does not deny that the district court trial is scheduled to conclude
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`before the FWD, that Petitioner asserted the same invalidity grounds at the district
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`court, or that the two proceedings involve the same claim construction issues.
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`Reply 2. Petitioner argues, however, that because the district court supposedly has
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`not yet "completed" claim construction and validity reports are not yet due, Patent
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`Owner cannot show definitive issue overlap. Reply at 2 (second paragraph), 3
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`(point 4). But the Markman hearing took place on November 5, 2019 where the
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`district court adopted Patent Owner's constructions for all disputed terms of the
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`'027 patent. Ex. 2013 at 128:13-130:10; Ex. 2014.2 Also tellingly—even though
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`the validity report is supposedly due shortly on December 23, 2019 (Reply at 2)—
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`Petitioner does not allege that it will give up the same prior art combination at
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`district court. Reply at 2-3; see also Ex. 2005 at 2 (fact discovery scheduled to
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`close on 11/21/2019).
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`Petitioner next argues that its Petition was timely because it was filed within
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`two months of Patent Owner's "narrowing" of the claims under protest. Reply at 2.
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`But Petitioner actually challenged all of the originally asserted claims so as to
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`"resolve claims that the Patent Owner may attempt to assert against Petitioner in
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`the future." Reply at 3-4. Petitioner never explains why it needed to wait until the
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`eve of the 315(b) deadline to file the Petition when it had decided to challenge all
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`originally asserted claims disclosed on January 23, 2019 (Ex. 1020 at 2, para. c).
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`Plainly, Petitioner could have filed the Petition earlier. Thus, as in NHK Spring, by
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`filing the Petition at the last minute, Petitioner elected to have the district court
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`address the validity issue.
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`Petitioner's third and fourth arguments assume that the district court would
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`delay the trial but provide no specific reason why this would be case, when neither
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`2 The single term still to be construed concerns another patent. Ex. 2014.
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`party has requested a delay in district court trial. Petitioner also argues that if the
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`district court trial occurs after the FWD, § 315(e) would prevent it from presenting
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`the same ground of validity and therefore there would be no overlap between the
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`IPR and the district court case. Reply at 3. But that would be true in all IPR cases,
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`and cannot possibly be a reason for justifying discretionary institution.
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`Petitioner also argues that Intel v. Qualcomm supports its position. Reply at
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`4. Specifically, Petitioner also argues that the Board should institute because it has
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`allegedly shown a strong likelihood of success in its challenge. Id. The reply,
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`however, does not offer a single rebuttal to the noted deficiencies in the POPR.
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`Reply 4. More importantly, Petitioner fails to appreciate that in Intel, the parallel
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`ITC decision addressed only a single claim at issue in the IPRs. Paper 8 at 16 n.8.
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`The Board thus decided to address similar issues for claims not addressed by the
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`ITC. In contrast, here, the same set of claims would be at issue in the district court
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`case and the IPR. Under the facts of this case, an IPR trial that concludes after the
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`district court case would not "provide an effective and efficient alternative to
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`district court litigation." NHK Spring, Paper 8 at 20. This fact favors discretionary
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`denial of institution.
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` For these and reasons stated in the POPR, denial under 314(a) is proper.
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`/Hong Zhong /
`H. Annita Zhong (Reg. No. 66,530)
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6, the undersigned certifies that on
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`November 14, 2019, a copy of the foregoing document PATENT OWNER'S
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`SUR-REPLY IN SUPPORT OF PATENT OWNER'S PRELIMINARY
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`RESPONSE and Exhibits 2013-2014 were served by electronic mail upon the
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`following:
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`WILMER, CUTLER, PICKERING, HALE AND DORR LLP
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`Dominic E. Massa, Reg. No. 44,905
`Dominic.Massa@wilmerhale.com
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`Richard Goldenberg, Reg. 38,895
`Richard.Goldenberg@wilmerhale.com
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`Daniel Williams, Reg. No. 45,221
`Daniel.Williams@wilmerhale.com
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`Yvonne Lee, Reg. No. 72,162
`Yvonne.Lee@wilmerhale.com
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`/Susan M. Langworthy/
` Susan M. Langworthy
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